ED can only probe money laundering cases: Delhi HC

A single-judge bench of Justice Yashwant Varma observed that PMLA empowers the ED to investigate Section 3 offences only.

New Delhi: The Delhi High Court has ruled that the Enforcement Directorate (ED) does not hold the power to probe any other offence except money laundering cases and cannot by itself assume that a predicate offence has been committed.

A single-judge bench of Justice Yashwant Varma observed that Prevention of Money Laundering Act (PMLA) empowers the ED to investigate Section 3 offences only.

Justice Varma said: “It becomes pertinent to observe that the ED stands empowered under the PMLA to try offences relating to money laundering. It neither stands conferred the authority nor the jurisdiction to investigate or to inquire into an offence other than that which stands comprised in Section 3 (of the PMLA).”

Citing the Supreme Court’s directions, the bench said: “The Supreme Court had pertinently observed that even if the ED in the course of its investigation and inquiry into an offence of money laundering were to come across material which would otherwise constitute a scheduled offence, it could furnish the requisite information to the authorities otherwise authorised by law to investigate those allegations and consider whether they would constitute the commission of a predicate offence.”

The court ruled that the primary responsibility for investigating and prosecuting crimes specified as scheduled offences under the PMLA belongs to the authorities established by those separate acts.

“ED cannot possibly arrogate unto itself the power to investigate or inquire into the alleged commission of those offences. In any case, it cannot, on its own motion, proceed on the surmise that a particular set of facts evidence the commission of a scheduled offence and based on that opinion initiate action under the PMLA,” it said.

The court also stated that ED would be required to provide the necessary information to the relevant agency in order for that agency to take the appropriate action if, after conducting its inquiry and investigation, ED determines that the material in its possession demonstrates the commission of an offence defined by any other enactment.